QUESTION 16 Curl Up & Dye, Inc. began Year 2 with $300 of supplies. It purchased $510 of supplies on account during the year. It paid $380 of the amount it owed for its supplies during the year. At December 31, Year 2, it only had $160 of supplies left. Supplies on the Balance Sheet at December 31, Year 2 equals

QUESTION 16 Curl Up & Dye, Inc. began Year 2 with $300 of supplies. It purchased $510 of supplies on account during the year. It paid $380 of the amount it owed for its supplies during the year. At December 31, Year 2, it only had $160 of supplies left. Supplies on the Balance Sheet at December 31, Year 2 equals

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter5: Accounting For Merchandising Businesses

Section: Chapter Questions

Problem 5.32EX: Closing entries On July 31, the close of the fiscal year, the balances of the accounts appearing in...

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Closing entries On July 31, the close of the fiscal year, the balances of the accounts appearing in the ledger of Serbian Interiors Company, a fumiture wholesaler, are as follows: Accumulated Depr.Building 365,000 Inventory 115,000 Administrative Expenses 440,000 Notes Payable 100,000 Building 810,000 Retained Earnings 455,000 Cash 78,000 Sales 1,437,000 Common Stock 75,000 Sales Tax Payable 4,500 Cost of Goods Sold 775,000 Selling Expenses 160,000 Dividends 15,000 Store Supplies 16,000 Interest Expense 6,000 Store Supplies Expense 21,500 Prepare the July 31 closing entries for Serbian Interiors Company.
Exercise 1-39 Current Assets and Current Liabilities Hanson Construction has an operating cycle of '5' months. On December 31. 2019, Hanson has the following assets and liabilities: A note receivable in the amount of $1500 10 be collected in 6 months Cash totaling $1,380 Accounts payable totaling $2,100, all of which will be paid within 2 months Accounts receivable totaling $12,000, including an account for $7,000 that will be paid in 2 months and an account for $5,000 that will be paid in 18 months Construction supplies coming $6,200, all of which will be used in construction within the next 12 months Construction equipment costing $60,000 on which depreciation of $22,400 has accumulated A note payable to the bank in the amount of $6,800 is to be paid within the next year Required: Calculate the amounts of current assets and current liabilities reported on Hansons balance sheet at December 31, 2019. CONCEPTUAL CONNECTION Comment on Hansons liquidity.
Multiple step income statement and balance sheet The following selected accounts anti their current balances appear in the ledger of Kanpur Co. for the fiscal year ended June 30, 2019: Cash 92,000 Accounts Receivable 450,000 Merchandise Inventory 370,000 Estimated Returns Inventory 5,000 Office Supplies 10,000 Prepaid Insurance 12,000 Office Equipment 220,000 Accumulated DepreciationOffice Equipment 58,000 Store Equipment 650,000 Accumulated DepreciationStore Equipment 87,500 Accounts Payable 38,500 Customer Refunds Payable 10,000 Salaries Payable 4,000 Note Payable (final payment due 2032) 140,000 Gerri Faber. Capital 431,000 Gerri Faber, Drawing 300,000 Sales 8,925,00 Cost of Merchandise Sold 5,620,00 Sales Salaries Expense 850,000 Advertising Expense 420,000 Depreciation Expense Store Equipment 33,000 Miscellaneous Selling Expense 18,000 Office Salaries Expense 540,000 Rent Expense 48,000 Insurance Expense 24,000 Depredation ExpenseOffice Equipment 10,000 Office Supplies Expense 4,000 Miscellaneous Administrative Exp. 6,000 Interest Expense 12,000 Instructions 1.Prepare a multiple-step income statement. 2.Prepare a statement of owners equity. 3.Prepare a balance sheet, assuming that the current portion of the note payable is 7,000. 4.Briefly explain how multiple-step and single-step income statements differ.
Exercise 3-38 Accrual- and Cash-Basis Expense Recognition The following information is taken from the accrual accounting records of Kroger Sales Company: During January, Kroger paid $9,150 for supplies to in sales to customers during the next 2 months (February and March). The supplies will be used evenly over the next 2 months. Kroger pays its employees at the end of each month for salaries earned during that month. Salaries paid at the end of February and March amounted to $4,925 and $5,100, respectively. Kroger placed an advertisement in the local newspaper during March at a cost of $850. The ad promoted the pre-spring sale during the last week in March. Kroger did not pay for the newspaper ad until mid-April. Required: Under cash-basis accounting, how much exvxn.se should Kroger report for February and March? Under accrual-basis accounting, how much expense should Kroger report for February and March? CONCEPTUAL CONNECTION Which basis of accounting provides the most useful information for decision-makers? Why?
Continuing Problem 4.Total of Debit column: 40,750 The transactions completed by PS Music during June 20Y5 were described .it the end of Chapter 1. The following transactions were completed during July, the second month of businesss operations: July 1. Peyton Smith made an additional investment k PS Music in exchange for common stock by depositing 5,000 in PS Mu wet checking account. 1.Instead of continuing to share office space with a local real estate agency. Peyton decided to rent office space near a local musk store, Paid rent for July, 1,750. 1.Paid a premium of 2,700 for a comprehensive insurance policy covering liability, theft and fire. The policy covers a one year period. 2.Received 1,000 on account 3. On behalf of PS Musk, Peyton signed a contract with a local radio station. KXMD, to provide guest spots for the next three months. The contract requires PS Musk to provide a guest disc jockey for 80 hours per month for a monthly fee of 3,600. Any additional hours beyond 80 will be billed to KXMD at 40 per hour. In accordance with the contract Peyton received 7,200 from KXMD as an advance payment for the first two months. 3.Paid 2SO on account 4.Paid an attorney 900 for reviewing the July 3 contract with KXMD. (Record as Miscellaneous Expense.) 5.Purchased office equipment on account from Office Mart. 7,500. 8.Paid for a newspaper advertisement 200. 11.Received 1.000 for serving as a disc jockey for a party. 13.Paid 700 to a local audio electronics store for rental of digital recording equipment 14.Paid wages of 1,200 to receptionist and part-time assistant. Enter the following transactions on Pane 2 of the two-column journal: 16.Received 2,000 for serving as a disc jockey for a wedding reception. 18.Purchased supplies on account 850 21.Paid 620 to Upload Musk for use of its current musk demos in making various musk sets. 22.Paid 800 to a local radio station to advertise the services of PS Music twice daily for the remainder of July. 23.Served as disc jockey for a party for 2,500 Received 750, with the remainder due August 4.20YS. 27.Paid electric Ml 915. 28.Paid wages of 1,200 to receptionist and part-time assistant. 29.Paid miscellaneous expenses, 540. 30.Served as a disc jockey for a charity ball for 1,500, Received S00 with the remainder due on August 9. 20Y5. 31.Received 3,000 for serving as a disc jockey for a party. 31.Paid 1.400 royalties (musk expense) to National Musk Clearing for use of various artists music during July. 31. Paid dividends, 1,250. PS Musics chart of accounts and the balance of accounts as of July 1, 20Y5 (all normal balances), are as follows: 11 Cash 3,920 12 Accounts Receivable 1,000 14 Supplies 170 15 Prepaid Insurance 17 Office Equipment 21 Accounts Payable 250 23 Unearned Revenue 31 Common Stock 4.000 33 Dividends 500 41 Fees Earned 6,200 50 Wages Expense 400 51 Office Rent Expense 800 52 Equipment Rent Expense 67S 53 Utilities Expense 300 54 Music Expense 1.590 55 Advertising Expense 500 56 Supplies Expense 180 59 Miscellaneous Expense 415 Instructions 1. Enter the July 1, 20Y5, account balances in the appropriate balance column of a four-column account. Write Balance in the Item column, and place a check mark () in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.) 2. Analyze and journalize each transaction in a two-column journal beginning on Page 1, omitting journal entry explanations. 3. Post the journal to the ledger, extending the account balance to the appropriate balance column after each posting. 4. Prepare an unadjusted trial balance as of July 31, 20Y5.
Exercise 1-38 Identifying Current Assets and Liabilities Dunn Sporting Goods sells athletic clothing and footwear 10 retail customers. Dunns accountant indicates that the firms operating cycle averages 6 months. At December 31, 2019, Dunn has the following assets and liabilities: Prepaid rent in the amount of 58,500. Dunns rent is $500 per month. A $9,700 account payable due in 45 days. Inventory in the amount of $46,230. Dunn expects to sell $38,000 of the inventory within 3 months. The remainder will be placed in storage until September 2020. The items placed in storage should be sold by November 2020. An investment in marketable securities in the amount of $1,900. Dunn expects to sell $700 of the marketable securities in 6 months. The remainder are not expected to be sold until 2022. Cash in the amount of $1,050. An equipment loan in the amount of $60,000 due in March 2024. Interest of $4,500 is due in March 2020 ($3,750 of the interest relates to 2019. with the remainder relating to the first 3 months of 2020). An account receivable from a local university in the amount of $2,850. The university has promised to pay the full amount in 3 months. Store equipment at a cost of $9,200. Accumulated depreciation has been recorded on the store equipment in the amount of 51,250. Required: Prepare the current asset and current liability portions of Dunns December 31, 20191 balance-sheet. Compute Dunns working capital and current ratio at December 31, 2019. CONCEPTUAL CONNECTION As in investor or creditor. what do these ratios tell you about Dunns liquidity?
Cornerstone Exercise 3-12 Accrual- and Cash-Basis Revenue McDonald Music sells used CDs for S4.00 each. During the month of April, McDonald sold 7,650 CDs for cash and 13,220 CDs on credit. McDonalds cash collections in April included $30,600 for the CDs sold for cash, $12,800 for CDs sold on credit during the previous month, and $29,850 for CDs sold on credit during April. Required: Calculate the amount of revenue recognized in April under (1) cash-basis accounting and (2) accrual-basis accounting.